Banta sold to R.R. Donnelley for $1.3 billion

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The 800-pound gorilla of the printing industry just got a lot bigger. After the markets closed on Tuesday, R.R. Donnelley & Sons Company, already one of the largest printers in the country, and Banta Corp. announced a deal that will see the former acquiring the latter for $1.3 billion in cash, or $36.50 per share after a special dividend of $16 per share already declared by Banta.

The news ends several turbulent months for Banta. The printer announced two reorganizations that included staff reductions at the same time that competitor Cenveo Inc. bid for Banta while publicly deriding Banta's cost-reduction strategies. The deal with Donnelley has been unanimously approved by the board of directors of both companies and is expected close in the first quarter of 2007.

"In the highly fragmented printing industry, Banta is a substantial participant whose acquisition will extend our industry-leading position in key segments," said Donnelley CEO Mark A. Angelson during a conference call to discuss the acquisition.

Donnelley, Chicago, expects to expand its range of products and services to the magazine, catalog, book and direct marketing segments. The deal also will enhance Donnelley's geographic footprint and create opportunities for additional scale in locations where the company is already present.

Approximately 70 percent of Banta's business comes from printing and its services, Mr. Angelson said. It has annual revenues of approximately $1.5 billion and operations in the United States, Europe and Asia.

The balance consists of Menasha, WA-based Banta's supply chain management services, which complement Donnelley's own logistics resources, including procurement, sourcing and fulfillment, Mr. Angelson said.

"These supply chain capabilities surround printing with value-added services, extending cross-selling opportunities and deepening customer relationships," he said.

The two companies' publishing, catalog and direct marketing customers, in particular, are expected to benefit from the combined resources and enhanced flexibility.

Meanwhile, Cenveo on Oct. 31 withdrew its offer to acquire Banta for $34 per share after the special dividend without Banta ever entering into discussions with company.

Banta announced rounds of reorganization in July and September designed to bring the company cost savings and make it more competitive in the print and supply-chain management industries.

The changes included laying off 6 percent of its workforce, reorganizing Banta's print sector from five divisions into two, centralizing administrative functions, eliminating non-essential services and closing or selling five print facilities.

Banta last month said it would explore all strategies for maximizing shareholder value, including a possible sale of the company.

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